Vhi Healthcare Announce Surplus After Tax Profit Of €65m

Vhi Healthcare has announced that it recorded a surplus after tax of €65 million for its consolidated business for the year ending 31 December.

This surplus represents a margin of 4.4%, an improvement on the surplus of €54.3 million or 3.8% margin achieved in 2012. At the end of 2013, Vhi Healthcare had free cash reserves of over –389 million, bringing the company’s solvency level to 156% compared to 108% in 2012 and 100% in 2011. Vhi Healthcare also announced that it had finalised a 4 year reinsurance agreement with Berkshire Hathaway and had made an application for authorisation by the Central Bank of Ireland.

Commenting on the financial results John O'Dwyer, CEO, Vhi Healthcare, said: "Vhi Healthcare continued to perform well in a challenging market in 2013. We recorded a strong surplus on our consolidated business, improved our solvency position and maintained a low operating cost ratio. The improved financial results have been achieved on the back of a number of key initiatives taken in 2012 and 2013 which will continue to bear fruit in future years. These initiatives focussed primarily on claims cost management and the cost of claims has reduced by 2.1% in the year. The business also purchased reinsurance for the first time in order to improve its solvency position."

Vhi Healthcare also announced that the organisation has reached a longer–term reinsurance agreement with Berkshire Hathaway. This builds on the one year agreement secured in 2013 and is an acknowledgement of the company's improved financial position.

Commenting on the new reinsurance agreement, Mr John O'Dwyer said: "We are delighted to build on the initial agreement we had in place with Berkshire Hathaway and value their support. We feel this is a vote of confidence from a highly respected company and look forward to continuing our partnership over the next four years. Putting in place a longer–term reinsurance arrangement and demonstrating that the business was sustainable in the long term was critical in making our submission to the Central Bank."

(CD/IT)